Stewart Ogilby
Independent Advisor — The Estate PlanTM
Phone: 1-800-998-2523

Florida Living Trust Estate Planning Trust Overview The Estate Plan TM Henry W. Abts III

The Agony of Probate

A primary reason to set up a RLT is to avoid probate

Henry W. Abts III makes this statement: "In the United States today, PROBATE is one of the most agonizing and expensive experiences in which an individual can participate. To name someone as the executor of your Will (Last Will and Testament), is to place an incredibly painful burden upon that individual. I would not wish that experience on my worst enemy."

If all you have is a Will, the executor of your Will (usually a loved one) must settle your estate through the Probate Court. Here is a list of some of the demands of the Probate Court:

  1. Locate the current will and file with the Probate Division of the Circuit Court (or District Court).

  2. Petition the Court to be appointed as Executor (personal representative of the estate).

  3. Obtain permission from the Court to pay a support allowance to the family (if needed).

  4. Prepare an inventory of estate assets including brokerage and bank accounts, realty, mobile homes, automobiles and other vehicles, furniture, jewelry and other possessions, filing the original with the Court and sending copies to the beneficiaries.

  5. Publish the "Notice of Administration" in a newspaper acceptable to the Court.

  6. If necessary, oppose in Court all incorrect or invalid claims against the estate.

  7. Petition the Court for approval to sell real property if the Will did not give that authority to the executor. Notify each beneficiary as to their right to a hearing on the matter. Prepare a "consent to sale of real estate and waiver of hearing" form to be signed by each beneficiary, if applicable.

  8. Prepare detailed final accounting which is acceptable to the Court, sending copies to the beneficiaries.

  9. File the plan of distribution with the Court.

  10. Prepare Report of Final Distribution, sending the original to Court with copies to beneficiaries.

  11. Petition Court for discharge of Executor.

In addition, there are another 37 administrative duties required of executors. Most executors will not have the time to learn all the proper procedures, complete all the forms required, and make all the trips to the Probate Court. Probate attorneys realize this fact and, of course, capitalize on it. In most states, statutory law allows attorneys to charge a fee of 2% or more of the estate to be probated. However, when you add on extraordinary fees and administrative fees, the percentage increases. Attorney Abts states that many firms charge a flat 5%, but it is not unusual for the fee to run even higher than that. It is not difficult to see why attorneys who make their incomes from antiquated probate laws, do not want those laws changed.

Ralph Nader (himself a lawyer) described probate as "the screwing of the average corpse." Probate is a system that is supposed to ensure that a dead person's debts and taxes are paid, that his will is valid, and that his estate will go to the people named in his will.

Lawyers have a legal monopoly on performing probate. They typically earn over $1,000 per hour for this "service." Says David Hapgood in The Screwing of the Average Man: "Most of the money spent on probate goes, by widespread agreement, to support expert make-work. Judge William Haworth of Oklahoma, interviewed on the CBS television program "Sixty Minutes," estimated that 90 percent of probate legal work is unnecessary; he added that what work had to be done could usually be done better as well as more cheaply by a legal secretary." [From: The Economic Rape of America, Chapter Ten -"The Worst Professional Screwmasters".]

MANY ATTORNEYS AND CPA'S TALK DOWN A LIVING TRUST.

People invariably ask, "Why didn't my attorney tell me about the Living Trust'?" You may believe that the reason was that the attorney would not get his or her probate fee. Attorneys talk among themselves about their "accumulated Wills," much as you and I would speak about retirement plans. The attorneys will comment to each other with pride, "I've got ten drawers of Wills," or "I've got seventeen drawers of Wills," or "I've got twenty-three drawers of Wills." Such Wills are sometimes seen as an attorney's "retirement plan"!

However, after having recognized the tremendous potential of the Living Trust, most of the attorneys then admit that they had never been taught about the Living Trust in law school. Unlike the typical legal courses, which include Wills and torts, the Living Trust is included only in the elective courses taught for attorneys who wish to specialize in estate planning. Consequently, even though greed may be a reason why some attorneys try to steer clients away from a Living Trust, lack of knowledge or familiarity with the Living Trust can also be a major factor.

Occasionally, someone will turn to his or her accountant for advice about the advisability of having a Living Trust. Often the accountant will respond that, since the client's estate is under $2 million, the client does not need a Living Trust. However, the accountant is only addressing federal estate taxes, not the probate process. Most accountants are not knowledgeable or experienced in estate planing - which is the function of reducing estate taxes and probate costs in the future. Typically, estate planing is not a normal function of an accountant.

If an attorney or accountant tells you that your estate will not have to go through probate or gives you a specific probate cost, ask him or her to put the statement in writing.

You may be surprised to know what some notable people paid to have their estate settled through the probate process.

  • Dwight D. Eisenhower - $2,905,850 estate reduced by $671,420 - a 23% loss!

  • Nat "King" Cole - $1,876,640 estate reduced by $1,577,740 - a 84% loss!

  • Franklin D. Roosevelt - $1,940,990 estate reduced by $574,860 - a 29% loss!

  • General George S. Patton - $844,360 estate reduced by $266,820 - a 31% loss!

What about your estate? Well, a recent study by AARP (American Association of Retired Persons) found that the average cost of probate was 10% of the gross estate (from Modern Maturity magazine August-September 1991 issue)

Henry Abts says probate is an unnecessary expense and burden on the heirs. He states that the solution is to set up a Revocable Living Trust. When coupled with an estate organizing system, the RLT can greatly reduce the time and expense of an estate settlement.

With a living trust, your heirs avoid the high costs of probate because your assets are titled in your name as trustee rather than in your individual name as owner. While you are alive and competent, you control your financial affairs much the same as you do without a trust. You manage your assets, receive the income, pay bills, etc. However, when you can no longer manage your affairs (either when determined incompetent or at death), your successor trustee (someone you name) automatically takes over. At your death, they can then settle your estate without going through the entire probate process or without hiring attorneys, if they so desire.

There is security and peace of mind that accompanies The Estate PlanTM Universal Living Trust with its Personal Estate Preservation Program Binder™ There is nothing else like it. Our clients love it; you deserve it.

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Stewart Ogilby
Florida based -- referrals nationwide
Independent Advisor — The Estate PlanTM
Toll-free     1-800-998-2523
(941) 545-3600
Email: WiseBird@pobox.com
Florida Living Trust Estate Planning Trust Overview The Estate Plan TM Henry W. Abts III

This material is not intended to be legal advice and should not be considered to be legal advice. It does not constitute the recommendation of any legal document for any specific client. It is educational material summarized from books that are widely available in public libraries and in books and other publications that are sold in every state through retail outlets.